The Policy Brief: February 2019

Thursday, February 14, 2019

In This Issue:

Interested in public policy? What policy issues would you like CMF to research next? Email Olivia Lewis, CMF public policy fellow: [email protected]


Introducing the Policy Brief

Dear Colleagues,

The new year has brought a new state government administration, new state policy priorities and now a new member service to keep you informed.

This is the first edition of The Policy Brief, a tool to further CMF’s policy-related information sharing. This quarterly communication will include updates designed to inform and educate CMF members on relevant and timely policy issues throughout Michigan and beyond that may connect to the work of the philanthropic sector.

The Policy Brief will also highlight the work of the Public Policy Committee (PPC) and the Government Relations Committee (GRC), both operated by CMF. Since 2001, the PPC has monitored state and local policies that affect CMF members’ interests and the communities they serve, engaged in public-private funder dialogue and made policy recommendations to the CMF Board of Trustees to take action.

Under the responsibility of CMF’s public policy fellow, Olivia Lewis, The Policy Brief will provide updates of well-researched and analyzed policy to increase transparency, build awareness and expedite information sharing so you can knowledgeably advocate for issues with policy considerations.

With Gratitude,

Kyle Caldwell, president and CEO
Olivia Lewis, public policy fellow


Policy Radar: Scholarship Displacement Affecting Michigan’s Students

Thousands of dollars from the Community Foundation of the Holland/Zeeland Area intended to help local students pay for college have remained unspent due to scholarship displacement.

There’s an excess of $13,000 in the Promise Scholarship Program for the 2018-2019 school year.

Scholarship displacement happens when a college or university replaces need-based aid with private scholarship dollars instead of adding together the aid sources.

A representative of the Community Foundation of the Holland/Zeeland Area said each of their scholarship recipients could have received about $1,857 more this school year to be used for tuition, books, room and board.

“For local donors to pull off a scholarship like this, we’re doing all that fundraising and it’s hard,” said Stacy Timmerman, scholarship director at CFHZ. “They (students) want to succeed and come back here. We’re trying to break the cycle of poverty and (hope students) come back and impact the people who are here.”

In Ann Arbor, a check was returned to the community foundation and program officers were told a student did not require financial assistance.

In the Fremont Area, one student submits book receipts to avoid the financial aid office and is reimbursed directly by the foundation.

In Michigan, displacement begins when a student has met the threshold for what the institution has determined is the full cost of attendance. Some colleges and universities argue private scholarships are still given to the intended student and in turn, need-based aid is deducted from the original aid package offered. This typically reduces work study programs or loans which allow the university to move institutional-based assistance to other students. But community foundations say displacing funds negates donor intent. 

CMF’s Public Policy Committee was briefed on the national context of scholarship displacement during their November meeting. The committee asked CMF to gather data and research specific to Michigan to discuss potential advocacy measures during their next meeting.

There are two primary factors that determine students’ financial aid packages: taxes and test scores.

  • At the federal level, the Free Application for Federal Student Aid (FAFSA) determines if a student qualifies for federal financial assistance based on their parents’ tax return from the previous year. The FAFSA also determines a household’s Expected Family Contribution (EFC), which is the amount a student pays out-of-pocket for the upcoming school year.

  • At the state level, colleges and universities report the total cost of attendance two years prior to the semester the student would begin taking classes. The state uses household income to determine whether a student is eligible for state-based grants and scholarships. For example, Michigan’s Tuition Incentive Program considers students who have received Medicaid in high school. Whether the student is attending an in-state institution, a private or public institution, a four-year or two-year college are also important factors.

  • After the federal and state government have determined what aid the student requires, the college considers the unmet needs and test scores to determine whether students qualify for institutional grants or scholarships, a work study program, or suggest loans based on the amount still owed to the university. Each university handles each student differently.

After the award package has been delivered, the student is required to report any additional scholarships awarded to ensure the student is not profiting from financial assistance. That’s usually when displacement begins to happen and can negatively affect students who may have accepted loans ahead of scholarships.

Some universities will suggest students reduce their loans (which can be difficult to do given the type of loan they have accepted) or automatically reduce the original student’s institution-based award of work study and grants to supplement other students who have received less institutional support.

“If the student’s need is already met, then other needs-based aid must be reduced,” a financial aid officer at a large public university said to CMF. “But we try to reduce other needs-based aid that is most beneficial to the student.”

However, the largest public universities in Michigan told CMF they don’t reduce the family contribution. These schools say they typically reduce aid based in this order: current balance on the student’s account, loans, and then grant funding. This change can be done unbeknownst to the student or their family until they are notified by the school, after the money has been recalculated.

A financial aid officer at a private college told CMF that there’s a discrepancy between the actual cost of attendance per year at each level of evaluation to determine a student’s financial aid eligibility.

“If a student in that situation comes in and has additional aid that goes in-between (state and federal overall cost of attendance), it’s displacing the state aid and (the college) would be required to displace the state aid,” she said. “We over anticipate at (institution name redacted) because not everyone is actually going to come to our school, and that’s common process.”


Bills We’re Watching

The current legislative session is abuzz as state and federal policy makers are busy at work. CMF tracks bills that affect the charitable sector and advocates for priorities made by the PPC and Board of Trustees. We coordinate with government officials as needed. Tracking bills and strategizing the best approaches to support our sector can often be stretched out over long periods of time, and sometimes legislation moves rather quickly.

We will do our best to keep you informed of the most pertinent legislative affairs through a variety of methods. That now includes The Policy Brief, our ongoing webinars, and the Learning Services events. We encourage you to take advantage of opportunities like Foundations on the Hill (scheduled for March 9-11, 2019) that allow you as members to educate elected officials about policy that affects your work.


Senate Bill 71: Amends sections of Michigan election law regarding individuals who are enrolled in the address confidentiality program.
Why we’re watching: In 2018, the PPC and Board of Trustees supported the November ballot proposal to increase access to voting for all Michiganders.

Senate Bill 78: This bill would require ballot instructions be printed on individual ballots.
Why we’re watching: In 2018, the PPC and Board of Trustees supported the November ballot proposal to increase access to voting for all Michiganders.

Senate Bill 79: This bill would revise the procedure for returning absentee ballots.
Why we’re watching: In 2018, the PPC and Board of Trustees supported the November ballot proposal to increase access to voting for all Michiganders.

Senate Bill 55: Restores the individual income tax credit for charitable donations to food banks, shelters, and community foundations.
Why we’re watching: CMF’s mission is to grow the impact of Michigan philanthropy. Incentives work and provide an equitable “on ramp” to charitable giving When Michiganders give, the sector can do more for the state. 


Johnson Amendment: A previous House of Representatives bill would have given nonprofits the ability to support elected officials.
Why we’re watching: The amendment provides clear boundaries for nonprofits engaging in advocacy and lobbying.  Repeal of the Johnson Amendment would open 501(c)3 nonprofits to anonymous political contributions that could negate the integrity of charitable giving.

UBIT: New tax laws expand UBIT from a tax on revenue (income) to a tax on nonprofit expenses (parking and transportation provided to employees) adding new costs to charities
Why we’re watching: Taxing nonprofits shifts limited resources away from critical missions and puts an added burden on donor contributions.


Policy Opportunities Through Partnership and Patience

Office of Foundation Liaison (OFL)

Annually, OFL hosts events, site visits and briefings designed to bring government and philanthropy together to understand policy issues, engage in collective problem solving and build cross-sector alignment. With OFL’s assistance, a 2016 visit to the Michigan Department of Corrections (MDOC) Richard A. Handlon Prison in Ionia led to a partnership with the Community Foundation of Southeast Michigan in 2018. 

The 2016 site-visit gave foundation and nonprofit partners across Michigan a glimpse at MDOC’s Vocational Village model for prisoner reentry and workforce training.

Outside the prison, a tall, double wall of fence and razor-wire dominate the landscape. Arriving participants were greeted by MDOC staff before passing through security. Inside, MDOC staff led participants through the prison yard which felt more akin to a college campus. There were inmates carrying books to class across a quad with surveillance from a group of training service dogs on the grass. Arriving at the Vocational Village wing of the prison, participants were brought to a welcome event with the all the offenders, staff and leadership associated with the program.

The group conversed with inmates, teachers and hiring partners while moving through nearly a dozen learning spaces for high demand trades. The site visit ended with a lunch prepared by the prison’s culinary training program and a dialogue with MDOC leadership about Vocational Village, MDOC’s strategic plan for offender success, and roles that philanthropy can play in assisting in improving outcomes.

The site visit was important for educating participants, challenging preconceptions about prison and creating a thought-provoking space for government and philanthropy dialogue. Through follow-up discussions with participants, OFL identified a specific funder interest in MDOC’s emerging effort to improve management of female prisoners at the Community Foundation for Southeast Michigan (CFSEM).

Surabhi Pandit, senior program officer at CFSEM, saw Michigan’s female prison population mirrored national trends of an increase of over 20 percent between 2012 and 2016. Knowing Pandit’s interest to learn more, OFL facilitated conversations between CFSEM and MDOC for several months thereafter.

“To be honest, we wouldn’t have remained engaged if OFL had not continued to pursue the partnership,” said Pandit.

Nearly a year later, CFSEM approved a grant to conduct a Gender Informed Practices Assessment (GIPA) for MDOC management of Michigan’s women’s prison at Huron Valley.

“The population has significant implications for our region and we were already funding in several areas that connect with this work,” Pandit said.

Nearly half of the 800-900 female prisoners that reenter Michigan society each year return to southeastern Michigan.

“OFL is in a unique position to understand the culture of government and philanthropy and does not have its own agenda,” said Pandit.

OFL remained engaged and actively monitored MDOC’s progress on the GIPA and, most recently, advocated for an early report on findings to CFSEM prior to the end of the Snyder Administration. Although GIPA findings are not yet released, this grant partnership has already led MDOC to conduct trainings on mental health and trauma for all of Michigan’s wardens, engage more directly with other state departments and reach out to leaders in the nonprofit sector for expertise and partnership.

Pandit concluded, “This was a good example of how our regional work can have broader policy implications."


Connecting the Dots Between Affinity Groups and the Public Policy Committee

Representation matters, and every CMF member has it.

For decades the CMF has supported philanthropists throughout the state. We’ve been committed to growing the impact of Michigan philanthropy and helping you create opportunities for vibrant communities.

Our work is done by hearing your voices, understanding your work and providing space for networking and engagement. We’ve also stayed informed of the ever-evolving policy changes from a charitable, social and economic perspective that affect the neighborhoods, towns, cities and communities that your work supports every day.

To keep track of what’s most important to you, CMF affinity groups allow members to delve into the issues most pertinent to their work. Even more, they provide representation into public policy discussions that have the potential for long-term impact. Each affinity group has representation on CMF’s Public Policy Committee through the group’s co-chairs. Housed under the PPC, affinity groups have representation to ensure the range of issues important to CMF members are voiced and considered.

Meeting on a quarterly basis, the PPC’s role is to advise the Board of Trustees on taking policy positions that may affect grantmakers’ interests in the nonprofit sector and are of importance to the citizens of Michigan.

The work of our affinity groups and the PPC have made a difference. Last year, the PPC supported two ballot issues: redistricting and voting access rights. They’ve discussed social issues like DACA and hate crimes and advocated for evidence-based economic research.

We recently updated the charters to each affinity group to ensure their purpose matches the work most important to you. Thank you for continuing to stay engaged, advocating for Michigan communities and being willing to learn and discuss policy in a thoughtful and constructive way.

Interested in public policy? What policy issues would you like CMF to research next? Email Olivia Lewis, CMF public policy fellow: [email protected]
News type: